Deductible as itemized deduction – this interest typically included in year end interest statement (form 1098)

Deductible as rental expense – this interest typically included in year end interest statement (form 1098)

902

Mortgage Insurance

Non-deductible

Amortized over term of mortgage

903

Hazard Insurance

Non-deductible

Deductible as rental expense

904-905

Miscellaneous

Varies

Varies

1001

Hazard Insurance

Non-deductible

Reserves – deductible when paid from escrow

1002

Mortgage Insurance

Non-deductible

Reserves – amortizable when paid from escrow

1003

City property taxes

Reserves – deductible as itemized deduction when paid from escrow

Reserves – deductible when paid from escrow

1004

County property taxes

Reserves – deductible as itemized deduction when paid from escrow

Reserves – deductible when paid from escrow

1005

Assessments

varies

varies

1006-8

Miscellaneous

varies

varies

1101

Settlement Fees

basis

basis

1102

Abstract or title search

basis

basis

1103

Title Examination

basis

basis

1104

Title Insurance binder

basis

basis

1105

Document Preparation

basis

basis

1106

Notary Fees

basis

basis

1107

Attorneys Fees

basis

Typically part of basis, if tenant related may be amortized over term of lease (s)

1108-1110

Title Insurance

basis

basis

1111-1113

Miscellaneous

Varies

Varies

1201

Recording Fees

basis

basis

1202

City/County tax stamps

basis

basis

1203

State tax/stamps

basis

basis

1204-05

Miscellaneous

Varies

Varies

1301

Survey

basis

basis

1302

Pest Inspection

basis

basis

1303-1305

Miscellaneous

Varies

Varies

The above table summarizes tax treatment to buyers of properties – for sellers, these costs (including remaining basis) are deducted at the time of sale, with the exception of costs that are specifically noted as non-deductible. Of course, capital gains may not be recognized if the property is a personal residence qualifying for the $ 250,000/$ 500,000 capital gain exclusion, or a rental property disposed of via a tax free exchange.

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